Twitter Like

Aug 4, 2009




                     W/RT FREGENET MANALHE  


DEC. 2010


First of all I would like to offer my deepest thanks to Ato Demis H/gebriel and W/rt Fregenet Manalhe for their valuable work and continuous help during the process of writing this research proposal, and also I would like to tank. Our other instructors and my friends those provides a constrictive idea for us to conduct this research proposal.


Background: The commercial bank of Ethiopia Jimma main branch is one type of financial institution which is located in Jimma, 346 km for from Addis Ababa.

The study, therefore focuses this society in particular to evaluate the contribution of the mention financial institution to the development of the society.

Objective:- The main objective of the study will be to assess the contribution of financial institution to the development of the society. It will be specifically analyses in depth the bank contribution to the local people and the people awareness about the importance of financial institution (The bank under study).

Methodology: the study will mainly based on primary data that are obtained at origin from the society, the data will be obtained through interview, quaternary and observation. The secondary data also concerned.

Data processing and analysis:- after the data will gathered from the society through different methods, it will be analysis and discussed qualitatively and quantitatively to the indicated result





1.1 Background of the study

The financial sector playes a critical role in the process of economic development by effectively mobilization and locate financial resources for their most productive uses. The development of financial sector, reducing information a symmetry and transaction costs encouraged financial savings and investment. Since investment is the core point of economic development. A bank makes investment in government securities and in the stocks of large reputed industrial concerns. While in case of loan the bank advances many against recognized sequrity and bills. (International trade and Bank and many page 153).

Commercial bank of Ethiopia Jimma branch  is one branch of commercial bank of Ethiopia among from 305 banks which is found south west of Addis Ababa  346km away. It was established in 1947 it provide different services for the society.

Commercial bank of Ethiopia create job opportunities to those individuals taking alone, by providing working capital (fund) to operate their business activities and receive return as interest for the principal they lend. So creating job opportunity increases the individuals living standard and this inturn increase the assets of individuals as well as the bank, these also leads to economic development of the country (From the Bank manual).

Currently commercial bank of Ethiopia offers the following credit products
-         Term loans (short medium and long term loans)
-         Over draft
-         Merchandise loans
And the bank accepts the following assets as collateral.
-         Building/houses
-         Motor vehicles
-         Construction machinery
The idea that initiated for this study is to understand the problem of commercial bank of Ethiopia for the economic development of the society.

The reason for the study is to assess the contribution of commercial bank of Ethiopia for the economic development of the society it specially in depth the bank contribution of the local people and increasing the people’s awareness about the importance of the commercial bank of Ethiopia

1.2. Background of the organization

Among banks in Ethiopia, commercial bank of Ethiopia is the bank that have a great market sher with 305 branches.

From its establishment in 1942 up to now, commercial bank of Ethiopia play a great role in the economic development and progress of the country.

It is the first bank in Ethiopia to introduce the service like automated teller motion (ATM), western union and mony transfer to the customer currently commercial bank of Ethiopia has about 3 million account holders and more than 8000 talented and committed employees.

As we know Jimma is one of the well known coffee traded regions in Ethiopia so there were many traders and farmers who were engaged in the activity of coffee trade and production of coffee for their effective activity.  The people of Jimma town and its surrounding did not take any long time to introduce to the banking services when the commercial bank of Ethiopia Jimma branch established in 1947E.C.

Commercial bank of Ethiopia Jimma Branch was established at 3235 square meters with mapping cost of 203, 335 birr for the ground to make living and construction cost of 819.120,17 birr and with a total cost of 1.594,942.42 Birr.

Since its establishment the bank provides current account, saving account, Loans and other services to its customers from the early establishment and now Commercial Bank of Ethiopia Jimma Branch provides many services to its customers and potential customers.

The provision of loans is one types of services lender and the borrower in particular and the country in general.  By having these importance in mind, the researcher gives a great emphasize to study about the loan repayment situations in this branch.

1.3 Statement of the problem

The bank promotes economic development by gathering the supply of funds from millions of individuals, depositors and making them available to investors those a real assets.  In performing these function the commercial banks improve the well being of both depositors and investors by improving economic efficiency that arises their living standard.  Banks contribution in Economic development of the society may have some problems in multi direction, either the bank fails to provide a qualified service or on the customer side may have problem like that of lack of peoples awareness about the bank significance or service.

In order to these problem the researcher will attempt to address the following quations.
1.      What are the contribution of the bank for the economic development of the country?
2.      What are the problem that affect the delivering of bank product or service?
3.      What are the factors that affect the banks contribution on the customer side?
4.      What is the attitude of the people towards the bank service?
5.      What are the methods that improve the contribution of commercial bank  of Ethiopia for the development of Jimma Town?

1.4 Objective of the study

1.4.1 General Objective

The main objective of this study is to identify the contribution of commercial bank of Ethiopia for the development of Jimma town..

1.4.2 Specific Objective

In addition to the general objective, the study has its own specific objective, they are

-      To assess the basic contribution of the bank for the economic development of the country.
-         To investigate the problems that affect the delivering of bank product/service/.
-         To assess the factors that affect the bank’s contribution on the customer side.
-         To investigate the attitude of the people towards the banks service.
-         To assess best methods that improves the contribution  of commercial bank of Ethiopia for the development of Jimma town.

1.5 Significance of the study

The study is expected to have a great significance both for the financial institution (the bank) can get the necessary details about problems that related to their economic contribution and on the other hand the society increases their awareness about the financial institution (bank) products and it may enable the society to capitalize the opportunity the bank provide  to make use of idle resource.

The study may play great role by informing commercial banks function for the society and identify correct their problems, which may help to eliminate (to reduce) poverty, creating an awareness of a society and properly usage of loans, improve and increase at the over all development.

1.6 Scope /Delimitation of the study

 The Commercial Bank of Ethiopia, Jimma Branch is one of the financial institution, that is located in the center of the town.

The study will be delaminated on this local society in particular to assess the contribution of Commercial Bank of Ethiopia for the economic development of the society Jimma town and evaluate the local peoples awareness specially current customers of the bank about the importance of the financial institution ( bank)

1.7  Limitation of the study

While conducting the study the researcher will face different obstacles such as lack of availability of adequate reference material in the bank lack of adequate time, financial constraints will be create difficulty on smooth operation of these proposal work.



The role of Commercial Bank in developing country besides performing the usual commercial banking function, bank in developing countries play an effective role in their  economic development.  The majority of people in such countries are poor unemployed and engaged in traditional agriculture. There is acute shortage of capital, people lack initiative and enterprise, means of transport are undeveloped industry is depressed. The role of commercial bank in developing country is discussed as under.

Financing policy:- The commercial banks financing industrial sector in a number of ways, they provide short term, medium term and long term loans to the industries sector.

Financing Trade:- The commercial Banks help the financing both internal and external trade. The banksprovide loans to retailers and whole salers to stock goods in which they deel. They also helping the movement of goods from one place to another by providing all types of facilities such as  discounting and accepting billes of exchange, providing over draft facilities, issuing drafts etc. moreover they finance both export and import of developing counties by providing foreign exchange facilities to importers and exporters of goods.

Financing agriculture:- The commercial bank typs helps the large agricultural secter in developing counties in a number of ways. They provide loans to traders in agricultural commodities. They open a network of branches in rural areas to provide agriculturalist for the marketing of their produce for the modernization and mechanization of their farms, for providing irrigation facilities for the developing land.
Financing consumer activity:- people in under developed counties being poor and having law income do not possess sufficient financial resources to buy durable consumer goods the commercial banks advance loans to consumers for the purchase of such items as houses, scooters, fans, refrigerator’s etc. in this way, they also help in raising the standard of having of the pole in developing counties by providing loans for a consumptive activity.

Help in monitory policy:- commercial bank the economic development of a country by faithfully following the monetary of the central bank. Thus the commercial banks contribute much to the growth of a developing economy by granting loans to agriculture trade and investment by helping in physical and human capital formation.  (Many, Banking and International Trade page 136-37)

2.1. Foreign AID/LOAN

The present world order has made different countries to have different economic level of development. The broad classification is developed (The first world), Transition (countries which were in the socialist camp and called second world) and developing (third world).

The most pressing concern of the governments of developing counties and their priority objectives are increase the out put level of the economy (growth and development), reduce their huge unemployed labor force, balance their income distribution develop the level of education and health facilities.

Foreign aid/loan, as one of the major source of development should be managed in away that can bring about sustainable development.

2.2. Function of commercial bank

Commercial banks perform a variety of functions which can be divided as accepting deposits, advancing loan, credit creation financing foreign trade, agency services and miscellaneous services to customers.



3.1. Source of data

In this paper both primary and secondary data sources were used. The primary data will be collected from managers. Employs and customers of commercial bank of Ethiopia Jimma branch.

The secondary data will be obtained from monthly and quarterly progress report and audit report of commercial bank of Ethiopia Jimma branch.

3.2. Method of data collection

As the source is identified above, both primary and secondary data were collected systematically to get realistic information from concerned bodies in collecting primary data questionnaires and unstructed interview were used. The quaternaries has both open ended and close ended types. The open ended question help respondent to express their idea in an unlimited may and close ended provide actualize questions to the respondent.

3.3. Method of sampling

The data will be collected from the current customer and employee of the bank. The researcher will select sampling by using non-probability techniques depending on the range of elements of the target population. In this case judgmental or purposive sampling techniques will preferred the researcher will be obtained qualitative and quantitative data from the target population.

The reason why this sampling technique used is that much less complicated to collect data’s less expensive and it also less time taking, and it also enables the researcher to get the required data only from the conserned bodies.

The study will ask a list of questions and the total population or the target group for this study is that 2470. from this 2470, 2407 are the customer of commercial bank of Ethiopia in Jimma branch and 63 are the employees of the bank.

The researcher will select 100%(63) of the employees of the bank by using judgmental sampling and 100 customers of the bank by using random sampling as a sample. So the total sample size will be 163.

3.4. Method of data analysis

After the relevant data will be collect descriptive method of data analysis were used. The analysis indicate transformation of raw data in to a form that makes easy to under stand and interest it.

Those to interpret the identified data, it sold be write in the form of tabulation, percentage and pie chart, to facilities the process of comparation, summation and cumulative of data.



4.1. Time budget

In order to manage the overall research process it needs time budget. The table given bellow shows that the time that will be taken from topic selection to final presentation.
Topic selection

Preparation of research proposal

Recommendation of comments to 1st draft of the proposal

Typing of final proposal (submition)


Collection of proposal


Data collection


Data analysis


 Submition of first draft research report comment


Typing of final report


Submition of final research



4.2. Cost budget

In order to undertake the research process effectively and efficient, it is necessary to prepare cost budget. The table given below shows the cost that is expected will be incurred in the research process.
Duration in day
Unit cost
Total cost
Personal cost
Researcher consumption



30 Br

18 Br

Equipment printing and duplicating

45 Br

140 Br

12 Br

2 Br

2 Br
Miscellaneous expense




-         Many Banking international trade 7th edition
-         Economic development 9th edition.
-         Loyd B. Thomas, many, Banking and financial markets, 1996
-         Manual of the bank


This questionnaire is designed to collect information on “the contribution of commercial bank of Ethiopia for the development of Jimma town.”

You are kindly requested to complete these question sincerely on honestly. All information you provided will be kept with strict confidence and will not be used for any other purpose except for intended academic research.

Tick the appropriate boxes are applicable to you and fill is the relivant information.
I. General background
            Age:-              20-355                     36-505                     51-65  5       >655
            Sex:-               Male 5                     Female 5
            Occupation:-                         Merchant 5                                     Farmer 5     
Employee 5                         Other 5
Religion:-                  Orthodox 5                         Protestant 5
                                    Muslim 5                             Others 5                  
II. Family members (in number)
            Male 5                     Female 5
1.      How much is your monthly income?
0-50 5                      51-1005                   101-300 5               301 -600 5              601-1200 5                         1201 – 2000 5        2001 – 3000 5       > 3000 5
2.      Is there any problem with regarding to the delivering of bank product /service/?
Yes 5                        No 5
3.      If your answer for Q 2 is Yes Please mention
Some of them            1. __________________________________________
                                    2. __________________________________________
3. __________________________________________
                                    4. __________________________________________
4.      If you are customer of the bank, is there any loan that you haven’t repaid?
Yes 5                        No 5
5.      If your answer for Q 4 is yes, why?
6.      If your answer for Q. 4 is No, did you repaid the loan at a time?
Yes 5                        No 5
7.      Is there a problem that affect the bank’s contribution on the customer side?
Yes 5                        No 5
8.      If your answer for Q 6 is yes can you mention some of them?
1.      __________________________________________________________
2.      __________________________________________________________
3.      __________________________________________________________
4.      __________________________________________________________
5.      __________________________________________________________
9.      If you are currently using the bank, How much you are satisfied by the service rendered?
Very much 5                       much 5                     Little 5
10. If your answer for Q 8 is little why?
11. Have you ever asked for bank loan previously?
Yes 5                        No 5
12. If your answer for Q 10 is yes for what purpose
5 To start new business
5 To expand my previous business
5 For building house
5 For farming purpose
5 For commercial purpose

13. If your answer for Q 11 is No explain  the reason?
14. What is your attitude towards the bank service?
Very good 5                              Good 5                     Poor 5
15. If your answer for Q 13 is poor why?
16. How much the bank contribute to the development of the society?
Very much 5                                   Little  5                    None  5
17. In what way the bank contribute to the society development?
Increases in per capital income 5
Road construction 5
Building Real estate 5

ÏT ¿’>y`c=+
¾u=´’e“ ›=¡•T>¡e ¢K?Ï

ÃI SÖÃp ¾}²Ò˨< K›=ƒÄåÁ ”ÓÉ v”Ÿ ÏT p`”Ýõ }ÖnT> Å”u™‹ c=J” SÖÃlU v”Ÿ< KŸ}T¨< Éу vK¨< ›e}ªî*  Là S[Í­‹” KScwcw ’¨<:: ¾²=I SÖÃp ›KT ¾}Ñ–¨<” S[Í uv”Ÿ=”Ó“  óÓ”e ƒUI`ƒ ¡õM KSËS]Á Ç=Ó] SS[mÁ êOõ  TTEÁ’ƒ KSÖkU ’¨<::

ØÁo¨<” c=VK< ”Å›eðLÑ>’~ UM¡„‹” (P)' (X) uTÉ[Ó  ”Ç=G<U  vÊ x­‹” ”Ç=VK< uƒIƒ“ ÃÖ¾nK<::

I. ›ÖnLà G<’@
§   ï                 ¨”É5                 c?ƒ 5
§  °ÉT@            
        Ÿ2®-35      36-505              51-65 5             > 655
§  ¾e^ ›Ã’ƒ       
                ’ÒÈ 5        Ñu_ 5       ¾S”Óeƒ W^}— 5        K?L 5
§  NÃT•ƒ
        *`„Ê¡e 5     S<eK=U 5         ýa‚e”ƒ 5   K?L 5
II. ¾u?}cw w³ƒ (ulØ`)  ¨”É5             c?ƒ 5
1. ¾¨` Ñu=­ U” ÁIM ’¨<;
        ®-5®5             51-1005            101-3005           301-6005  
        601-12005         1201-20005                2001-30005                > 30005
2.  v”Ÿ< KŸ}T¨< Éу ›e}ªî* c=ÁÅ`Ó ¾T>ÁÒØS< ‹Óa‹ ›K<;
        ›­ 5          ¾KU 5
   2.1 SMe­ ›­ ŸJ’ ‹Óa‹” ÃØkc<
3. ¾v”Ÿ< Å”u— J’¨< wÉ` ¨cŨ< e"G<” ÁMSKc<ƒ ›K;
                ›­ 5          ¾KU 5
  3.2 SMe­ ¾KU ŸJ’ wÉ`­” uÑ>²?¨< ŸõKªM;
                ›­ 5          uÑ>²?¨< ›MŸðMŸ<U  5
4. v”Ÿ< KŸ}T¨< Éу ›e}ªî* c=ÁÅ`Ó uÅ”u™‹ uŸ<M ‹Ó` ›K;
                ›­ 5          ¾KU 5
  4.1 SMe­ ›­ ŸJ’ ‹Óa‹” ÃØkc<
5. v”Ÿ<  uT>cÖ¨< ›ÑMÓKAƒ U” ÁIM Åe}— ’­ƒ;
        Åe}— ’˜ 5          Åc}— ›ÃÅKG<U 5
  5.1 SMe­ Åe}— ›ÃÅKG<U ŸJ’ KU”; 
6. Ÿv”Ÿ< wÉ` ÖÃk¨< Á¨<nK<;
        ›­ 5          ÖÃo ›L¨<pU 5
  6.1 SMe­ ›­ ŸJ’  KU” ØpU Á¨<K<M
        ›Ç=e e^ KSËS` 5                         Ku?ƒ Y^ 5
        ¾Uc^¨<” e^ KTeóóƒ 5                 K`h Y^ 5
        K”ÓÉ Y^ 5
  6.1 SMe­ ÖÃo ›L¨<pU ŸJ’ KU”; 
7. eKv”Ÿ< ›ÑMÓKƒ ÁK­ƒ ›SK"Ÿƒ U” ÃSeLM;
        u×U Ø\ 5                 Ø\ 5                Å"T 5

  7.1 SMe­ Å"T ŸJ’ KU”; 
8. KIw[}cu< Éу v”Ÿ< ›e}ªî* ¾T>Å`Ѩ< uU” ›Ã’ƒ S”ÑÉ ’¨<;
        ¾’õe ¨Ÿõ Ñu=” uSÚS` 5
        KS”ÑÉ Y^ 5
        KS•]Á u?ƒ Ó”v5
9. v”Ÿ< KIw[}cu< Éу U” ÁIM ›e}ªî* ›K¨<;
        u×U Ÿõ}— 5              uƒ”g< 5            ¾KU 5




  2. IN addition to the above comment its better to add your reference book

  3. Such a great post, The latest bit of this film is so prevalent and captivating one. Johnny is to a great degree so skilled on-screen character and I think this is nothing without the Johnny.

  4. Good blog post, At whatever point I have to eat the eminent sustenance or sweet sustenance I for the most part need to eat the cake. Much gratitude to you for sharing this click the link and me tender to make this equation at home.

  5. Good site, The person who is working in this field is so virtuoso and different people constantly welcome these people. I have no words to esteem these read this post who are by and by related to this field.

  6. Excellent blog, The person who will be in this kind of industry is indeed virtuoso and different folks continually pleasant these individuals . We have simply no terms to be able to respect these kinds of examine this kind of submit that are simply by and also simply by linked to this kind of industry.

  7. This is helping students a lot as this book can do wonders and you mustvisit site in best ways.

  8. Please i want to refer all this research